Site Navigation

Site Mobile Navigation

The Payroll Tax Fight

Republicans in Congress seem to have forgotten the embarrassment they suffered late last year for trying to block a payroll tax cut for millions of wage-earners. The two-month extension they reluctantly approved will run out in three weeks, yet, again, they are stalling a full-year’s tax cut with extraneous issues and political ploys.

The need for the 2-percentage-point payroll tax break is as great now as it was in December. Without it, 160 million people who get paychecks would have to pay the government nearly $1,000 more. The increase would severely reduce growth and derail the slow-moving economic recovery. Failure to agree on a tax cut would also cut off unemployment benefits for tens of thousands of workers in many of the hardest-hit states.

Politically, however, extending the tax break would represent a victory for President Obama, who has been championing it. That remains intolerable to many Republicans, particularly in the House. So they are insisting on several extraneous provisions that have nothing to do with a tax cut for the middle class, hoping either to achieve a few ideological victories for themselves or force negotiations with Democrats to a standstill.

At the behest of the manufacturing lobby, for example, Republican negotiators still want to delay an environmental regulation that would require industrial boilers and incinerators to release less mercury, lead and soot. What does that have to do with the payroll tax cut? Nothing, of course; Republicans are simply trying to get Democrats to pay a price for something they want.

They also want to require the jobless to be in G.E.D. programs and to undergo drug testing to get benefits, two punitive measures designed to stigmatize the desperate. And they still want a provision reviving the Keystone XL oil pipeline, hoping to fool voters into believing that Democrats who oppose it are somehow against jobs — even though the pipeline will create a very small number of long-term jobs. (The two sides have also failed to agree on how to prevent a cut in Medicare payments to doctors, which could drive many of them from the program.)

An error has occurred. Please try again later.

You are already subscribed to this email.

The biggest outstanding question, as it was last year, is how to pay for the tax cut for the next 10 months, which would cost about $90 billion. The best idea was still the original Democratic proposal, rejected by Republicans, to impose a surcharge on taxpayers who make more than $1 million a year. Democrats are now considering cutting corporate loopholes and using some savings from winding down the wars in Iraq and Afghanistan. There is no pressing need to offset the jobless benefits, which Republicans did not do when they held power in previous decades.

Republicans, on the other hand, are only interested in extending the tax benefits for working Americans if they can punish other groups. They want to extend the freeze on wages for federal workers to a third consecutive year, and appeal to their base by barring the use of welfare debit cards at casinos and strip clubs. This is hardly a national problem; a few states have allowed that, but most have cracked down on it.

Republicans seem no more serious about cutting the tax and stimulating the economy than they were in December. They may be furious that President Obama is campaigning against a do-nothing Congress, but they don’t seem as if they’re planning to actually do something.

A version of this editorial appears in print on February 7, 2012, on Page A30 of the New York edition with the headline: The Payroll Tax Fight. Today's Paper|Subscribe